IRS loses lawsuit in fight against tax preparers

Discussion in 'Economy' started by waltky, Jan 21, 2013.

  1. waltky
    Offline

    waltky Wise ol' monkey Supporting Member

    Joined:
    Feb 6, 2011
    Messages:
    20,776
    Thanks Received:
    1,788
    Trophy Points:
    215
    Location:
    Okolona, KY
    Ratings:
    +3,858
    A win for the 'little guy'...
    :clap2:
    IRS loses lawsuit in fight against tax preparers
    Fri, Jan 18, 2013 — A federal judge on Friday barred the IRS from imposing a series of new regulations, including a competency exam, on hundreds of thousands of tax preparers.
     
  2. waltky
    Offline

    waltky Wise ol' monkey Supporting Member

    Joined:
    Feb 6, 2011
    Messages:
    20,776
    Thanks Received:
    1,788
    Trophy Points:
    215
    Location:
    Okolona, KY
    Ratings:
    +3,858
    Granny says it just goes to show what a buncha sore losers the IRS is...
    :eusa_eh:
    IRS: We can read emails without warrant
    4/10/13 - The Internal Revenue Service (IRS) has claimed that agents do not need warrants to read people's emails, text messages and other private electronic communications, according to internal agency documents.
    See also:

    IRS tracks your digital footprint
    4/10/2013 - The IRS has quietly upgraded its technology so tax collectors can track virtually everything people do online.
     
    • Thank You! Thank You! x 1
  3. Mad Scientist
    Offline

    Mad Scientist Deplorable Gold Supporting Member Supporting Member

    Joined:
    Sep 15, 2008
    Messages:
    23,936
    Thanks Received:
    5,211
    Trophy Points:
    270
    Ratings:
    +7,676
    Which was the whole point of those Regulations. IRS wants a monopoly on Tax Preparation.
     
  4. oldfart
    Offline

    oldfart Older than dirt

    Joined:
    Nov 5, 2009
    Messages:
    2,354
    Thanks Received:
    462
    Trophy Points:
    140
    Location:
    Redneck Riviera
    Ratings:
    +527
    DISCLAIMER: I have been an enrolled agent ("Federally Authorized Tax Practitioner") since 1979 so I have an innate bias, but it's probably not what you think it is.

    First some background. The tax industry has two general classes of practitioners. There are the FATP's which include attorneys, CPA's, enrolled agents (EA's) and a few other miscellaneous special categories such as enrolled retirement plan agents, certified acceptance agents, and enrolled actuaries. All of these may practice before the IRS (handle audits, appeals, collections cases, etc) on behalf of taxpayers. They are governed by a set of regulations commonly known as Circular 230. This means they can be sanctioned or disbarred for unprofessional conduct. Attorneys and CPA's are licensed and regulated by each state and Treasury regulation under 230 is secondary. EA's however, are primarily regulated by the US Treasury and therefore must also demonstrate proficiency in taxation to gain the credential and meet continuing education requirements.

    Up until 1976, tax preparers were entirely unregulated. In the 1976 Tax Reform Act, a set of preparer penalties was enacted which has since been substantially expanded, requiring tax preparers to sign returns, provide taxpayers with copies of their returns, and exercise due diligence in preparing returns. With the advent of electronic filing in the mid-80's another set of regulations governing electronic filing gave the IRS additional regulatory powers over Electronic Return Originators (ERO's) which eventually included just about all tax preparers one way or another. A couple of decades ago, the IRS decided to exercise its power under the 76 Act to provide preparers with a substitute for their Social Security numbers in complying with the requirement that they provide their name, address, and tax identifying number on each return (a bonanza for identity thieves!). This was called a Preparer Tax Identifying Number (PTIN) which the IRS issued and maintained lists of. So I actually have four IRS/Treasury issued numbers; my PTIN, my EFIN, my enrollment number, and my CAF number (Central Authorization File number which uniquely identifies me in the IRS system as an authorized Power of Attorney when I represent a client).

    All of this pre-dates the most recent controversy and is unaffected by it. The judge in the present case makes a big deal of the fact that his ruling leaves all of this in place. Tax preparers must still apply for a PTIN, obey all of the regulations regarding preparer penalties under the 76 Act, comply with the electronic filing regulations, and conform to Circular 230 in their “limited practice without enrollment” (i.e. they can provide explanations to an IRS examiner as long as they do not argue in your behalf, but nothing else).

    What they got out of was demonstrating any competence in taxation whatsoever (avoiding a $145 exam fee), and meeting a continuing education requirement. That’s it.

    The IRS has already taken steps to justify the fee for “renewing” a PTIN and has shifted to a “vigorous” enforcement of preparer penalties, which the Congress has thoughtfully increased. For example, failure to retain records documenting due diligence in determining eligibility for earned income credit has increased from $100 to $500 PER RETURN and site visits are already happening. So instead of regulation with the procedural safeguards of Circular 230, preparers now face the prospect of being put out of business by fines often running into the tens of thousands of dollars for recordkeeping lapses (note that it is irrelevant whether the return is correct, the penalty applies for simply not documenting due diligence whether you did it or not.

    Way to go guys. With victories like this you stuck your heads in the noose and can jump off the platform now.
     
  5. waltky
    Offline

    waltky Wise ol' monkey Supporting Member

    Joined:
    Feb 6, 2011
    Messages:
    20,776
    Thanks Received:
    1,788
    Trophy Points:
    215
    Location:
    Okolona, KY
    Ratings:
    +3,858
    House looking into IRS email search policy...
    :cool:
    House lawmaker questions IRS over email search policy
    4/11/13 - The chairman of a House subcommittee is demanding more information from the Internal Revenue Service (IRS) about its practice of searching the emails of suspected tax fraudsters.

     

Share This Page